The normally dovish Fed head Yellen squashed dreams of lower interest rates a couple weeks ago when she said she thinks the economy is just peachy and she sees many more rate hikes in the next couple years. Bond traders headed for the exits, and interest rates shot up.

Her pronouncement reinforced the prevailing market sentiment that due to the Trump administration’s policies, economic growth and inflation are likely to exceed current expectations.

While that’s a reasonable conclusion, and it makes sense be cautious if you’ve not locked your mortgage rate, I don’t think the market is going to run away again like it did after the election. There still are so many unknowns concerning the new administration’s policies and how the world will react, in addition to the many other hurdles already facing the world economy.

The one economic measure that has my eye right now is inflation. While the Fed’s preferred measure, the core PCE index, remains benign, other measures are starting to tick up, and consumer expectations of inflation also are rising. Of course, those expectations could quickly reverse if oil prices start falling again.

The result of all this, I think, will continue to be market volatility. While market sentiment favors slightly higher rates, volatility would allow you to find a friendly dip to lock your rate.

Interest rates have pulled back a little from their recent highs. While that’s welcome relief after the post-election rise, it begs the question are rates going to continue rallying lower, or are they merely catching their breath before pushing even higher?

One thing seems clear to me. Markets were caught up in somewhat irrational exuberance after the election, which led to the 3/4 point jump in mortgage rates. Sure a Trump presidency is likely to be more business friendly, and sure an expanding economy could lead to higher interest rates. But, seriously, we know very little about the policies his administration will pursue, and many of those that have been mentioned, such as infrastructure spending and tariffs, may take years to develop.

I think the recent pullback is an acknowledgement of that, and it leaves markets struggling to find direction. The world still is a scary place, and the Trump administration is still a bit of an enigma. Given this, rates can get pushed around from day to day based on headlines and trade-flows. Overall, I think it’s more likely we’ll see lower rates than for rates to start rising again; however, I doubt it will be a straight line. If you want to bet on lower rates, pick a bail out point when you’ll lock if the market starts to move against you.